Tourism Industry Rejects Entertainment Tax Hike; Implements Old Regulation

TEMPO.CO, Jakarta - The head of Indonesian Tourism Industry Board (GIPI) Hariyadi Sukamdani rejected the entertainment tax hike to 40-70 percent. He and other entertainment industry actors refused to abide by the new law. "We will pay in accordance with the old bill," he said after a meeting with Coordinating Minister for Economic Affairs Airlangga Hartarto on Monday in Jakarta.

As of January 19, the Minister of Home Affairs released a circular letter that allowed local governments to provide fiscal incentives for business actors in that region.

"The Circular Letter is an affirmation of Article 101 of Law No. 1 of 2022, which has been confirmed by the minister that local leaders are allowed to release fiscal incentives," Hariyadi said.

Hariyadi hoped that the government would continue implementing the old law, Law No. 28 of 2004 on Local Tax and Retributions since it did not set any minimum limitation. 

In addition, the Law set out different entertainment tax fares for each region, with Jakarta being the highest at 25 percent. Other regions range from 15 to 10 percent of entertainment tax on average.

Hariyadi also lamented that the government has never involved relevant industry business actors in drafting Law No. 1 of 2022 despite being the object of the regulation. The government also failed to socialize the 40-75 percent tax hike. "There was never any public consultation with affected sectors," he said.

He claimed that no entertainment industry actors agree with the tax hike. "This regulation is discriminatory. Tax ought to be aimed at stimulating job opportunities and improving the local economy. What happens here is anything but that," Hariyadi concluded.

ANNISA FEBIOLA

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